If you are contemplating filing for bankruptcy, during your research you will hear about the bankruptcy "discharge." What is a bankruptcy discharge and what does it do? A bankruptcy discharge releases a debtor from liability for certain debts. This means that once a debt is discharged through bankruptcy, the debtor is no longer legally required to pay that debt.

A discharge is a permanent order that prohibits creditors from taking any form of collection action on a discharged debt. This includes calling the debtor, sending letters through the mail, or taking any legal action against the debtor.

Timing of the Bankruptcy Discharge

When does the discharge occur? The timing of a discharge varies, depending upon which chapter of bankruptcy the debtor files. In a Chapter 7 case, the discharge is granted around 60 days following the 341 meeting of the creditors. This is typically around four months after the debtor has filed the Chapter 7 bankruptcy petition with the clerk of the bankruptcy court.

With a Chapter 11 or Chapter 13 bankruptcy case, the court grants the discharge as soon as it is practical after the debtor has completed all of the payments under the plan. Since a Chapter 13 plan is arranged so that payments are made over the course of 3 to 5 years, the discharge typically occurs about four years after filing.

Unless the debtor faces any objections to the discharge from a creditor, trustee, or U.S. trustee, a bankruptcy is usually discharged automatically and without any conflicts.

The court may deny a Chapter 7 discharge if the debtor does not adhere to the requirements; for example, the debtor fails to provide the requested tax documents, the debtor fails to complete a course on financial management, or if the debtor transferred property with the intent to defraud creditors.

Working with an experienced bankruptcy attorney will ensure that you follow all of the requirements and reap the full benefits of a bankruptcy discharge!